Tariffs hit Beam Suntory’s full-year sales
Maker’s Mark owner Beam Suntory reported a mid-single-digit revenue increase for 2019, but was impacted by EU-US tariffs on American whiskey.
Albert Baladi, CEO of Beam Suntory, said the group “delivered very strong results in 2019”, but “were hurt by the impact of tariffs on Bourbon exports to the European Union, and the boycott of Japanese products in South Korea”.
“Total sales grew 6.5%, benefiting from our premiumisation actions across brands and markets,” said Baladi. “Sales grew at a mid-single-digit rate in the United States, at a high-single-digit rate in Japan, Australia, New Zealand and South Africa, and at double-digit rates in China, India, Southeast Asia, Russia and Mexico.”
The group said “sustained consumer demand for Bourbon and premium spirits helped drive strong growth” for Jim Beam, which grew 9%, and Maker’s Mark, which was up 11%. Super-premium small-batch Bourbons increased sales by 21%.
Courvoisier Cognac “continued to build momentum” with 7% sales growth.
Beam’s Japan business, Suntory Spirits, grew sales by 7% with “strong growth” from its whiskies, led by strategic brands Jim Beam, Kakubin, Torys and Maker’s Mark.
Ready-to-drink (RTD) products increased by 17% as a result of “very strong consumer demand” for the recently launched Kodawari Sakaba no Lemon Sour. The category’s growth was also boosted by the expansion of 196℃ Strong Zero and other canned Highball products, which Beam Suntory said consumers “increasingly enjoy with meals”.
Beam Suntory said it will renew the flavour and design of all canned Highball products and “propose an even better tasting highball to consumers”.
“In 2019, Japan became the largest export market in the world for Jim Beam, driven by popularity of the Highball serve,” added Baladi.
Beam Suntory sought to “inspire consumer interest with innovative new products” such as Suntory World Whisky Ao, Japanese vodka Haku and Japanese liqueur Kanade.
Looking ahead, the company said it “aims to outperform its global market by leveraging its strong routes to market and building its premium brands”.
In the Japan market, Beam Suntory will focus on expanding its business by “further developing and strengthening brands” such as Jim Beam, Torys, Maker’s Mark, Teachers, -196°C Strong Zero and Kodawari Sakaba no Lemon Sour.
The group will also “engage in activities focused on quality from product development to the consumption, and conduct active marketing activities such as selling new products providing new value”.
Total revenue for the alcoholic beverage segment within Beam Suntory’s parent company, Suntory Holdings, including beer and wine, was up by 3.1% to 1.04 trillion yen (US$9.5bn) excluding excise taxes. Operating income was up by 8.5% to 144.3bn yen (US$1bn).
Baladi added: “As we look ahead to 2020, we’ll continue to navigate geopolitical uncertainty. It’s vitally important to return to the zero-for-zero tariff environment that benefited trading partners on both sides of the Atlantic for more than two decades.
“And the coronavirus situation is creating challenges in key Asia markets. Even so, with our passionate worldwide team, we feel very good about the strategic actions we’re taking to meet consumers’ desire for premium products, refreshment, and brands with authentic heritage and legacies.”